Revenue and profit dropped for Atlanta-based rent-to-own giant Aaron’s in the first quarter of 2014 as foot traffic declined in almost three-fourth’s of the company’s stores because of severe weather.
The company reported net earnings dropped almost 25 percent from $51 million or 67 cents a share to $38.3 million or 53 cents a share during the same period a year ago. Revenue for the quarter, which ended March 31, fell 1 percent to $585.4 million compared to $593 million for the first quarter in 2013.
“Approximately 70 percent of company-operated stores have been identified as having operations adversely impacted by the severe weather events that occurred during the first three months of the year,” Chief Executive Officer Ron Allen said in a statement. “This includes a significant number of store closings as well as elevated utility and maintenance expenses. We estimate the negative impact of the weather conditions on revenue during the quarter in the range of $5.5 million to $6.5 million and the diluted earnings per share impact between $.05 and $.06 per share.”
Aaron’s performance has been the subject of intense scrutiny after its second-largest shareholder launched an unsolicited takeover bid in February for $2.3 billion. That action was dropped last week after Aaron’s announced it had purchased online lender Progressive Finance for $700 million.
Allen said revenues for same stores opened at least one year dropped 2.1 percent in the quarter and 3.7 percent for same stores opened at least two years.
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